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What You Should Know about Gifts to Physicians from Industry Module 1: Overview of Ethical, Professional, and Legal Issues Authors Karine Morin, LLM Jacqueline M. Darrah, JD, MA

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What You Should Know about Gifts to Physicians from IndustryModule 1:Overview of Ethical, Professional, and Legal Issues

authors
Authors
  • Karine Morin, LLM
  • Jacqueline M. Darrah, JD, MA
  • In collaboration with the Working Group for the Communication of Ethical Guidelines for Gifts to Physicians from Industry and its Educational Advisory Committee chaired by R. Van Harrison, PhD. University of Michigan School of Medicine. (See http://www.ama-assn.org/ama/pub/category/8405.html for information about the Working Group)
  • Reviewers for this module included AMA staff, Working Group on Communication of Ethical Guidelines for Gifts to Physicians from Industry, and Kenneth V. Iserson, M.D., MBA, Director, Arizona Bioethics Program, University of Arizona.
  • Project Manager: Beverley D. Rowley, Ph.D. Medical Education and Research Associates, Inc. Tempe Arizona
  • Disclosure of Conflict of Interest
  • There are no conflicts to disclose from faculty, module authors, or members of the planning committee.
  • The content of this CME publication does not contain discussion of off-label uses.

American Medical Association

disclosure of conflict of interest
Disclosure of Conflict of Interest
  • Insert name and affiliation(s) of presenter

American Medical Association

why the increased scrutiny
Why the Increased Scrutiny?
  • Three key factors have prompted the medical profession to carefully consider the interactions between physicians and industry:
    • Media reports
    • Drug costs
    • Direct-to-consumer (DTC) advertising

American Medical Association

quick questions
Quick Questions
  • Q1: How do the media present pharmaceutical industry practices?
  • Q2:Is the cost of drugs related to their promotion?
  • Q3:Does DTC advertising have an impact onprescribing habits?

American Medical Association

module goals and objectives
Module Goals and Objectives
  • To introduce general concepts related to professionalism, ethics, and the laws that pertain to physician-industry relations
  • To understand how these various factors are distinct or overlap, and to understand how they influence the interactions between physicians and industry
  • To analyze specific types of interactions between physicians and industry according to these factors

American Medical Association

slide7
Note
  • Laws are in constant evolution, as are the underlying precepts of professionalism and medical ethics. Federal agencies are constantly updating their regulations and providing interpretive guidance concerning the pharmaceutical industry and its relationship with physicians. As enforcement policies evolve or regulations change, taking any gift intended to affect prescribing may be defined as a bribe or kickback and may entail legal difficulty. Every physician should be aware of both current laws and ethical guidelines, and should consult with qualified legal counsel.

American Medical Association

topic 1 professionalism commerce and conflicts
Topic 1: Professionalism, Commerce, and Conflicts
  • This topic addresses:
    • Fundamental differences between professionalism and commerce in medical care
    • Issues related to conflicts of interest

American Medical Association

physician vs industry representative
A Physician

An Industry Representative

Physician vs. Industry Representative

In healthcare, what are the differences between physicians and industry representatives?

American Medical Association

physician vs industry representative10
A Physician

Uses knowledge for altruistic purposes, highly valued by society

Is granted a large degree of freedom by society

Is regulated through a professional code of conduct

Has an obligation to provide impartial medical care that will benefit patients or promote public health

Has extensive scientific and medical training and expertise

Is trained to objectively analyze medical information

Has a lifetime commitment to education and training

An Industry Representative

Uses product-specific, generally proprietary knowledge for profit

Is self- and government-regulated

Engages in a for-profit, commercial activity

May have latest or detailed information on new agents, trials, treatment strategies, but…

May lack or be unable to disseminate relevant scientific knowledge due to restrictions (e.g., cannot discuss off-label applications)

Is trained to provide specific information about a product, often through promotion and advertising

Physician vs. Industry Representative

In healthcare, what are the differences between physicians and industry representatives?

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medical vs promotional information
Informationamong Medical Peers

Promotional Information

Medical vs. Promotional Information

What are the differences between general healthcare information and promotional information?

American Medical Association

medical vs promotional information12
Informationamong Medical Peers

Balanced in terms of positive and negative content

Unregulated

Intended to facilitate good patient care

Promotional Information

Biased in terms of most advantageous content

Highly regulated by government agencies

Intended to increase sales

Medical vs. Promotional Information

What are the differences between general healthcare information and promotional information?

American Medical Association

medical vs promotional information13
Medical vs. Promotional Information
  • In the dissemination of information, physicians and industry…
  • a) share the same needs
  • b) have some needs in common
  • c) have only conflicting needs

American Medical Association

medical vs promotional information14
Medical vs. Promotional Information
  • In the dissemination of information, physicians and industry…
  • … have some needs in common.
  • As a market-driven entity, the industry may have certain goals in disseminating information that do not perfectly overlap with healthcare’s need for medical information.

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conflicts of interest
Conflicts of Interest
  • What are the key underlying issues?
    • A referee who is the parent of a player
    • Politicians required to disclose sources of funding
    • Integrity of TV ad testimonials
    • Commissions for boosting sales
    • Physicians disclosing sources of funding

American Medical Association

gift giving quick case 1
Judge  Lawyer

MD  Representative

Gift-Giving – Quick Case 1

What is the impact of gift-giving on relationships between the following?

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gift giving quick case 117
Judge  Lawyer

Lawyer represents client

Lawyer and client interests are aligned

Gifts from lawyer may influence judge’s decision

Severe sanctions can be imposed

MD  Representative

Representative represents product and company

Interests of representative may not align with interests of patients

Gifts from representative may influence MD’s decision

Until recently, only egregious instances sanctioned, but now there is increased scrutiny

Gift-Giving – Quick Case 1

What is the impact of gift-giving on relationships between the following?

American Medical Association

gift giving quick case 118
Gift-Giving – Quick Case 1

What is the impact of gift-giving on relationships between the following?

A judge and a lawyer

vs

A physician and an industry representative

  • To maintain the same level of integrity and independent decision-making as that expected of a judge, physicians must ensure that they maintain an impartial relationship with industry representatives – free of any influences.

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conflicts of interest19
Conflicts of Interest
  • In each case there is the potential for:
    • dual loyalties
    • subjectivity in conflict with objectivity
    • varying accountability

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fiduciary characteristics
Fiduciary Characteristics
  • A fiduciary is one who:
    • holds a specialized knowledge or expertise
    • holds the trust of others
    • is held to high standards of conduct
    • avoids conflicts of interest
    • does not seek personal gain
    • is objective
    • is accountable or obligated (ethically and legally)

How many of these characteristics apply to physicians?

All of the characteristics should apply to a physician. Therefore, a physician is, in effect, a fiduciary, and should avoid conflicts that could undermine patient care.

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avoiding conflicts of interest
Avoiding Conflicts of Interest
  • When you have a conflict, potential conflict, or perceived conflict of interest, the best action is to…
  • a) avoid the conflict
  • b) disclose the conflict
  • c) mitigate the conflict
  • d) all of the above

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avoiding conflicts of interest22
Avoiding Conflicts of Interest
  • When you have a conflict, potential conflict, or perceived conflict of interest, the best action is to…
  • …consider all options, including consulting legal counsel, if it appears that a conflict of interest could undermine the integrity of judgment in the evaluation or presentation of scientific data, or the integrity of a medical recommendation in the clinical setting.

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primary and secondary interest
Primary Interest

Patient welfare

Developing new medical knowledge

Secondary Interest

Personal gain

Financial reward

Peer recognition

Primary and Secondary Interest

What are examples of primary and secondaryinterests in healthcare?

Gifts to physicians can interfere – or be perceived as interfering – with the fiduciary relationship between a physician and a patient, creating a possible conflict of interest.

To avoid this, a proactive position on gifts to physicians can help mitigate or avoid conflicts of interest altogether.

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conflicts of interest quick case 2
Conflicts of Interest – Quick Case 2
  • While evaluating a new type of scanner for a clinic, one of the manufacturers of the scanner being considered offers to fly the physician doing the assessment to a training center in a distant resort area for two days with all expenses paid.
  • What are the possible conflicts in this offer?

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conflicts of interest quick case 225
Conflicts of Interest – Quick Case 2
  • While evaluating a new type of scanner for a clinic, one of the manufacturers of the scanner being considered offers to fly the physician doing the assessment to a training center in a distant resort area for two days with all expenses paid.
  • What are the possible conflicts in this offer?
    • Will this offer assist the physician in choosing the best scanner for the clinic?
    • Will the physician’s knowledge of competitive products be similar?
    • How may the objectives of the manufacturer conflict with those of the physician?
    • Will training be the only activity?

American Medical Association

conflicts of interest quick case 226
Conflicts of Interest – Quick Case 2
  • What could be done to ensure there are no conflicts of interest?
  • The physician could:
    • accept training only after a supplier has been chosen
    • clarify that the training schedule and agenda are appropriate for the physician’s objectives
    • arrange transportation, lodging, and meals at own expense

American Medical Association

professionalism commerce and conflicts summary
Professionalism, Commerce, and Conflicts Summary
  • To maintain the appropriate balance between “profession” and “commerce” of healthcare, physician-industry interactions should:
    • ensure the integrity of the physician-patient relationship
    • promote patient welfare
    • avoid any actual or apparent conflicts of interest

American Medical Association

topic 2 relevant laws
Topic 2: Relevant Laws
  • This topic addresses three general legal issues regarding gifts:
    • Fraud
    • Kickbacks
    • Self-referral

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the law in general
The Law In General

Fraud

  • Government laws regarding fraud address financial issues:
    • filing false claims
    • paying or soliciting for or receiving bribes or kickbacks for referrals
    • self-referral schemes

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fraud
Fraud
  • False claims

Billing for goods or services for which reimbursement claims were filed, but which were not provided, or were not provided or billed in accordance with relevant rules

American Medical Association

fraud31
Fraud
  • False claims

Billing for goods or services for which reimbursement claims were filed, but which were not provided, or were not provided or billed in accordance with relevant rules

  • 2. Bribes or kickbacks

Payments from a seller back to the buyer to induce a referral or purchase, including fee-splitting

American Medical Association

fraud32
Fraud
  • False claims

Billing for goods or services for which reimbursement claims were filed, but which were not provided, or were not provided or billed in accordance with relevant rules

  • 2. Bribes or kickbacks

Payments from a seller back to the buyer to induce a referral or purchase, including fee-splitting

  • 3. Self-referral schemes

Physicians who have a financial relationship with a provider of designated healthcare services who refer Medicare or Medicaid patients to such providers

American Medical Association

fraud33
Fraud
  • Unethical relations with industry…
  • A pharmaceutical company marketing a prostate cancer drug agreed to an out-of-court settlement of approximately $875 million in criminal penalties and damages under the False Claims Act.
  • This was in relation to practices considered improper, such as manipulating drug reimbursement regulations; providing improper incentives to physicians that influenced ordering of the drug; and violating FDA prohibitions on the sale of free drug samples.

American Medical Association

fraud34
Fraud
  • Unethical relations with industry…
  • Although public attention focused on the fraud aspect, the inappropriate inducements between manufacturers and physicians led to the prosecution of physicians.

American Medical Association

kickbacks
Kickbacks

Anti-Kickback Laws and Gifts

  • In general, the law prohibits individuals from knowingly and willfully soliciting or receiving, as well as offering to pay any remuneration, in return for or to induce:
    • referral of an individual to a person for the furnishing(or arranging for the furnishing) of any item or service…
    • purchasing, leasing, ordering (or arranging for, or recommending purchasing, leasing, or ordering) any good, facility, or item…
  • …covered by a federal healthcare program.

American Medical Association

kickbacks36
Kickbacks

Anti-Kickback Laws and Gifts

  • In August 1994, the Office of Inspector General (OIG) issued a Special Fraud Alert regarding suspicious behavior, such as:
    • marketing practices that appear to extend beyond traditional advertising or educational activities
    • certain arrangements that could undermine providers’ obligation “…to provide treatments and recommend products in the best interest of patients”

American Medical Association

kickbacks37
Kickbacks

Anti-Kickback Laws and Gifts

  • A gift would be considered in violation of theanti-kickback statute if it is…
    • made to a person in a position to generate business for the paying party
    • related to writing specific prescriptions
    • related to the volume of business generated
    • more than nominal in value and/or exceeds fair market value (of any legitimate service rendered to the payer)
    • related to the referral of patients

American Medical Association

kickbacks anti kickback laws and gifts
KickbacksAnti-Kickback Laws and Gifts
  • Before accepting a gift or any other financial benefit from a pharmaceutical or medical device company, a physician should consider the following questions:
    • Is the gift/reward/payment conditioned in whole or in part on referrals or other business generated?
    • Is the gift/reward/payment more than trivial in value?
    • Do fees for services exceed fair market value?
    • Does the gift/reward/payment have the potential to affect costs to any federal health care programs or their beneficiaries or to lead to over utilization or inappropriate utilization?
    • Would acceptance of the gift/reward/payment diminish, or appear to diminish, the objectivity of professional judgment?
  • If the answer to any of these questions is “yes”, then a potential legal concern arises.

American Medical Association

self referral
Self-Referral

Anti-Self-Referral Laws and Gifts

  • If a physician has a financial relationshipwith an entity:
    • The physician may not make a referral to the entity for the furnishing of designated health services for which payment otherwise may be made under a federal health program
    • The entity may not present or cause to be presented a claim to any individual, third-party payer, or other entity for designated health services furnished pursuant to a referral prohibited by this law

[42 USC §1395nn(a)(1)]

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relevant laws summary
Relevant Laws Summary
  • To ensure compliance with laws addressing kickback and self-referral, physicians should be familiar with the specific language of any relevant federal and state statutes, as well as any applicable exceptions.
  • It is always advisable to seek qualified legal counsel.
  • The role of the FDA in issues related to physicians and industry representatives is addressed in Module 2: Physicians’ Expectations of Industry and Sales Personnel.

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topic 3 consulting
Topic 3: Consulting
  • This topic addresses fundamental ethicsand guidelines regarding:
    • Consulting for industry
    • Conducting research for industry
    • Speaking or writing on behalf of industry

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consulting
Law

Specific description of professional services

Written agreement for services (more than one year)

Compensation established in advance

Fair market value compensation

Compensation independent of value or volume of referrals paid by federal or state healthcare

Reasonable to accomplish intended purpose of the agreement

Does not otherwise violate federal or state law

PhRMA Code

Legitimate need for the services identified

Selection of consultants directly related to the identified purpose

Appropriate use of services provided

Written contract specifies nature of services

Specified basis for payment

Appropriate venue and circumstances of any meeting

Consulting

Service Agreements

How is legitimate consulting defined in law and the PhRMA Code?

American Medical Association

consulting quick case 3
Consulting – Quick Case 3
  • Physicians are invited to a one-day consultants’ forum sponsored by a pharma company at a luxury hotel. Their opinions will be solicited on issues surrounding the management and care of patients with disease X and on a product’s marketing plan and positions.
  • The afternoon is free with tickets provided to the ball game and a gourmet buffet with open bar. Air transportation and hotel accommodations are covered, and participants will receive a $500 honorarium.
  • Are the physicians acting as true consultants?

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consulting quick case 344
Service

Legitimate need of service?

True exchange of professional services?

Appropriate use of specified services?

Contract

Written contract or agreement?

Services specified in contract?

Compensation specified in contract?

Compensation

Specified basis for compensation?

Fair market value compensation?

Compensation established in advance?

Other Considerations

Appropriate meeting venue?

Appropriate reason to meet?

Independent of referral value or volume?

Consulting – Quick Case 3

Arethe physicians acting as true consultants?

American Medical Association

consulting quick case 345
Consulting – Quick Case 3

Arethe physicians acting as true consultants?

    • Exchange of professional services is vague
    • No specific criteria determining the selection of consultants
    • No clear objective to the session
    • Honorarium assumed to be fair market value and set in advance
  • However, the absence of a contract, and the appropriateness of the venue and some of the activities, all shed doubt on the legitimacy of the activity.

American Medical Association

compensation quick case 4
Compensation – Quick Case 4
  • Some physicians are demanding that drug company sales personnel pay for the physicians’ time.
  • Would “dollars for detail” be considered ethical according to government orindustry regulations?

American Medical Association

compensation quick case 447
Compensation – Quick Case 4
  • Some physicians are demanding that drug company sales personnel pay for the physician’s time.
  • Would “dollars for detail” be considered ethical according to government orindustry regulations?
  • In a detail visit, physicians rarely provide a service – they are the recipients of information.
  • Therefore, the AMA’s Council on Ethical and Judicial Affairs recently stated that accepting compensation for a detail visit was inappropriate.

American Medical Association

conducting research for industry
Conducting Research for Industry

Guidelines

  • Physicians who participate in industry-sponsored research should ensure:
    • integrity of research and protection of human subjects
    • sound medical judgment is not influenced by third-party interests
    • compensation is related to services performed
    • compliance with ethical guidelines on potential conflicts of interest
    • adherence to funding, review, or publishing disclosure requirements

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research quick case 5
Research – Quick Case 5
  • Interested primary care physicians are invited to join a consultant program involving an educational conference on a common clinical condition. Each physician is asked to enlist 10 patients to participate in a clinical monitoring program that does not advocate any preferred pharmaceutical product.
  • Physicians also participate in two teleconferences to help educate colleagues. An honorarium of $200 is paid for each of the two-hour teleconferences.
  • What does or does not qualify this arrangement as
  • bona fide consulting?

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research quick case 550
Bona Fide

Compensation specified in advance

Fair market value

No value or volume of referral

Questionable

Vague specification of professional services

Questionable scientific basis of clinical monitoring program

No evidence of Institutional Review Board approval

No written or executed contract

Unspecified period [<1 year?]

Legitimate need for services not identified

Nonspecific physician selection criteria

Appropriate use? unknown

Appropriate venue? unknown

Research – Quick Case 5

What does or does not qualify this arrangement asbona fide consulting?

American Medical Association

research quick case 551
Research – Quick Case 5
  • The guidelines for consulting for industry and for conducting research for industry have many similarities.
  • Before physicians participate in any research activity, they:
    • must have received Institutional Review Board approval of the protocol
    • must have received informed consent.
    • should consult federal and state laws and regulations
    • should consult relevant professional codes

What does or does not qualify this arrangement asbona fide consulting?

American Medical Association

speaking or writing for industry
Speaking or Writing for Industry

Guidelines

  • When appropriate, physicians should follow:
    • guidelines applicable to CME programs
    • guidelines established by the International Committee of Medical Journal Editors
    • instructions from peer-reviewed publications

American Medical Association

speaking or writing for industry53
Speaking or Writing for Industry
  • Is the use of “guest authors” or “ghost authors”
  • an ethical practice?

American Medical Association

speaking or writing for industry54
Speaking or Writing for Industry
  • Is the use of “guest authors” or “ghost authors”
  • an ethical practice?
  • Authors must take public responsibility for the work and have participated in the research, according to the International Committee of Medical Journal Editors (ICMJE), which sets the Uniform Requirements for Manuscripts Submitted to Biomedical Journals.
  • Whether as guest or ghost authors, there is misrepresentation: physicians who are identified, but who have not done the work they are credited with, receive professional recognition. This is unethical as it undermines the integrity of the research endeavor.

American Medical Association

clinical trials quick case 6
Clinical Trials – Quick Case 6
  • Of 107 clinical trials published in 1984, industry-sponsored studies were:
    • 5 times more likely to favor new therapy
    • 11 times more likely to reach favorable conclusions
  • In 70 articles debating the efficacy of calcium-channel antagonists (CCAs), supportive authors were more likely to have:
    • relationships with manufacturers of CCAs than were neutral or critical authors
    • ties with competitor manufacturers as well as any manufacturer

American Medical Association

clinical trials quick case 656
Physician

Independent, objective evaluation

Patient benefit

Obligation to share promising information

Industry

Positive interpretation

Market dominance and return on investment

Patent protection

Clinical Trials – Quick Case 6

What does this suggest about the interests and obligations of physicians and industry in industry-sponsored clinical trials and articles?

These data bring into question the objectivity of industry-sponsored trials and articles written by physicians on behalf of industry, emphasizing the importance of mechanisms put in place by medical journals, such as peer review and disclosure of research funding.

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consulting summary
Consulting Summary
  • Physicians should be familiar with potential conflicts of interest and potential legal concerns regarding ownership and investment interests in medical resources.
  • Service agreements should satisfy applicable guidelines when consulting, conducting research, or speaking or writing on behalf of industry.
  • The issue of gifts to physicians is addressed in detail in:
  • Module 3: Professional Issues Concerning Gifts to Physicians from Industry
  • Module 4: AMA Ethical Guidelines on Gifts to Physicians from Industry

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module review
Module Review
  • General concepts related to professionalism, ethics, and laws regarding physician-industry relations:
    • Professionalism and commerce in medical care
    • Issues related to conflicts of interest
  • Laws that influence interactions between physicians and industry:
    • Fraud
    • Kickbacks
    • Self-referral
  • Specific types of interactions between physiciansand industry:
    • Consulting for industry
    • Conducting research for industry
    • Speaking or writing on behalf of industry

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take away points
Take-Away Points
  • Physicians are professionals and retain unique responsibilities.
  • The “fiduciary” nature of the patient-physician relationship requires physicians to act according to high standards of conduct.
  • Physicians should ensure that interactions with industry are free of any conflicts of interest that could compromise or appear to compromise their judgment.
  • Most financial arrangements with industry should be reviewed with qualified legal counsel to verify that they conform to ethical guidelines and the law.

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what you should know about gifts to physicians from industry
What You Should Know about Gifts to Physicians from Industry
  • Module 2: Physicians’ Expectations of Industry and Sales Personnel
  • Module 3: Professional Issues Concerning Gifts to Physicians from Industry
  • Module 4: AMA Ethical Guidelines on Gifts to Physicians from Industry

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feedback
Feedback
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    • Please complete the Presentation Evaluation Forms[in Participant’s Handout]
    • Please include any questions that could not beaddressed during the session on the Follow-up Form[in Participant’s Handout]
  • Thank you for your participation!

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